The jig is up for John M. Donnelly. On May 11, exactly two months after federal authorities raided his downtown office and took him into custody, the 52-year-old Albemarle County man pled guilty to four felony counts relating to a multi-million dollar Ponzi scheme he perpetrated over more than a decade.

Dressed in the black and white striped uniform of the Central Virginia Regional Jail in Orange, where he's been incarcerated since his arrest, Donnelly sat straight and spoke clearly as he answered questions from Judge Norman K. Moon in U.S. District Court.

"I feel good today," he said in a response to a question about his mental and physical capacity to enter the guilty plea. Minutes later, Donnelly listened as Assistant U.S. District Attorney Ron Huber outlined the four charges: wire fraud, securities fraud, fraud in connection with futures contracts, and impeding the administration of internal revenue laws.

As his wife, UVA fundraising honcho Deborah Donnelly, looked on from her second-row courtroom seat, he affirmed his decision to plead guilty to each count and waived his right to appeal.

Managing Assistant U.S. District Attorney Steve Phleger (left) and defense attorney John Davidson answer reporters' questions after John M. Donnelly's guilty plea on May 11.PHOTOS BY WILL WALKER

With the convictions, Donnelly faces a maximum sentence of 48 years and fines of nearly $6 million in addition to any restitution he may be ordered to pay his victims at his sentencing scheduled for September.

Some court watchers may have been surprised by one development: prosecutors agreed to release Donnelly on $100,000 bond, secured by his Crozet-area house, which is assessed at $597,700. He will remain under house arrest for the next four months, must surrender his passport, and will be monitored electronically and by a parole officer.

While Donnelly may be looking forward to returning to the gracious 3,000+ square-foot home he shares with his wife and two children in western Albemarle, prosecutors explained after the hearing that the decision to support his request for bond was simply practical.

"We have to spend a fair amount of time calculating the exact amount of the loss," said Steve Phleger, managing assistant U.S. Attorney in the Charlottesville office, "and Mr. Donnelly has agreed to assist."

Because of the complexity of Donnelly's crimes– and the length of time over which he committed them– Phleger said having Donnelly readily accessible to assist with the unraveling is key. (Master Ponzi schemer Bernie Madoff had a similar arrangement with prosecutors in New York, although the extent of his cooperation is in question.)

According to documents filed with the court, Donnelly– a weekend motorcycle racer– swindled his teammates and friends out of millions by using new investors’ money to pay off early investors– a scam known as a Ponzi. As detailed in a Hook cover story, The scam collapsed when his main investor attempted to withdraw more than Donnelly could produce.

A multi-agency investigation into Donnelly’s misdeeds resulted in what appears to be a taped confession as Donnelly admits to an investor that he never actually invested any money.

While initial documents pegged the loss at more than $11 million, prosecutors now acknowledge the amount could be lower– although still "in excess" of $5 million.

"John Donnelly looked his friends, neighbors, co-workers and strangers in the eye and lied to them," says U.S. Attorney for the Western District of Virginia Julia C. Dudley in a statement released after the hearing. "He lied to them and then he took their money, in some instances their life savings. He did this knowing that, in all in the likelihood, they would never see that money again. And he did it all in the name of greed, to line his own pockets and live a lavish lifestyles."

Prosecutors have alleged that Donnelly took at least one million dollars in salary and fees over the last three years he ran the scam. But speaking after the hearing, Donnelly's attorney, John Davidson, attempted to paint a more sympathetic picture of a client who "feels terrible" about a situation that had "spun out of control."

Donnelly's #1 goal said his attorney, "is paying back every dime" to his investors. Asked if Donnelly– facing decades in prison– believes he will be able to make such restitution, Davidson answered quickly: "He's going to spend the rest of his life" doing so. And it may not be quite as hard as some say: "We don't believe the loss is as great as has been reported," Davidson said.

Establishing the exact amount of the swindle is critical for sentencing purposes, explained Davidson, who also answered questions about Donnelly's wife. At the time of Donnelly's arrest, Deborah Donnelly was named a "relief defendant," someone who may have received, even unwittingly, ill gotten gains. There is no evidence suggesting Mrs. Donnelly was complicit in any of her husband's crimes, says Davidson.

"She knew nothing," he says, "but she still loves him."

Donnelly's sentencing hearing is scheduled for Monday, September 14 at 10am in U.S. District Court.